Speaking to Asharq Al-Awsat on the sidelines of the IMF and World Bank meetings in Washington, DC last week, Assaf said: “This new company will be the main investment tool for three important players in the country, all of which have important expansion plans in strategic sectors including the petrochemicals and petroleum industries, which will help the Saudi industrial sector.”
The Saudi Arabian Company for Industrial Investment, which was approved by the Saudi cabinet in March, is a joint venture between the Saudi finance ministry’s Public Investment Fund (PIF), state-owned oil firm Saudi Aramco, and chemical manufacturing company the Saudi Basic Industries Corporation (SABIC).
The PIF owns 50 percent of the 2 billion Saudi riyal (533 million US dollar) venture, with Saudi Aramco and SABIC owning 25 percent each.
The company will focus its investments on strategic sectors of the economy and conversion industries relying on petrochemicals, plastics, fertilizers, steel, aluminum and basic industries, and those that will help drive the diversification of Saudi Arabia’s economy, Assaf said.
Assaf said the company will officially begin operations “soon,” after preliminary procedures, including a meeting of the company’s constituent assembly in the coming months, after which a board of directors and an executive management committee will be chosen.
The company was set up in line with government efforts to develop a broad downstream industrial base, along with the creation of industrial zones making full us of the Kingdom’s low energy costs and readily available raw materials.
The government has recently been offloading some of its stakes in private- and state-owned companies. The government is currently arranging the sale of 15 percent of its 69 percent holding in National Commercial Bank (NCB), the Kingdom’s largest lender—which it owns through the PIF—in an initial public offering on the Saudi stock market slated for later this year.
Assaf did not rule out a similar move from the government in the future regarding the new company. “There are currently no . . . [plans] to sell [government] stakes in Saudi companies like what has happened with NCB. Though if any company is ready to be offered [publicly], then this will be looked into . . . if it is a PIF-owned company then the board of directors will decide the next step based on the benefit from an investment point-of-view.”